Firm Said To Have Lost More Than 1,000 Staff Over Bonuses

The Sunday Times reports that, according to its unnamed sources, over 1,000 investment bankers have quit Royal Bank of Scotland this year, which represents around 5% of the headcount over at the bank's Global Banking & Markets Division.

Not surprisingly, the bank is thought likely to lose hundreds more due to the current fracas with the UK government over bonuses. Rivals like Barclays Capital, Nomura and Societe Generale are thought to be only too pleased to pick up top talent that RBS is seemingly unable to appropriately reward.

Now politicians like Labour's Harriet Harman and the Lib Dem's Vince Cable will no doubt cry 'good riddance' to the departing bankers, but the 1,000 bankers that have already left are thought to have been responsible for bringing in up to $1.16bn in revenues last year - revenues that the bank desperately needs if it is ever to repay the UK taxpayer for its recent bailouts.

In the meantime, The Independent on Sunday reports that RBS and the UK government are close to sorting out the bonus spat (UK Chancellor Alistair Darling insists that the bank shouldn't pay any more than last year, whereas the bank board has indicated that it may resign if it isn't free to act independently and pay what is required). The newspaper quotes an RBS insider, who said: 'No decisions have been taken on the amounts to be paid, but there will be many discussions over the next few weeks. We don't take any final decision until February, but there's no question of us paying staff huge amounts - not in this climate'.

Darling also told the BBC that 'what you can't do is have bonuses that are wholly unreasonable and not related in any to improved performance', but he recognised that 'you've got to make sure you've got sufficient incentives for people who are doing a good day's job'.

And Reuters reports that Fidelity International has responded to City Minister Lord Myner's call for institutional shareholders to become involved in the bonus debate by saying: 'As with all issues related to governance, we believe that these matters are most productively debated and discussed with companies between the parties, and not in the full glare of the public'.

Finally, Bloomberg reports that US Treasury Secretary Tim Geithner has once again hit out at big bank bonuses, telling the new agency's TV channel that: 'It is very important that we change the way these executives are paid, the form of compensation, this year. We have to end that era of irresponsibly high bonuses'. Geithner also dismissed the recent claims of Goldman co-President Gary Cohn that his firm might not have failed if the US government hadn't intervened to bailout the financial system. 'None of them would have survived', said Geithner, 'The entire US financial system and all the major firms in the country, and even small banks across the country, were at that moment in the middle of a classic run, a classic bank run'.